All about Credit Monitoring Arrangement (CMA data)

Updated on Dec. 10, 2021, 6:34 a.m.

Credit Monitoring Arrangement Data or CMA data provides details about financial position of a business. CMA data is prepared to extend or obtain fresh financing from banks.

Credit Monitoring Arrangement or CMA data is used by banks to assess the financial position of a business to increase/decrease or maintain lending position. CMA data contains financial details of business which helps banks to review the financing arrangement.

CMA report is used by banks to assess the past performance and as well as future expected performance of business. Banks decides modification in financial arrangement (loans or working capital) based on CMA report.

Contents of CMA Report

CMA report contains financial results of a business. Credit Monitoring Arrangement report contains results from operations and financial position of business along with ratios and analysis.

A CMA report should contain following statements:

  1. Covering page
  2. Existing borrowings and proposed borrowings
  3. Balance Sheet
  4. Profit and Loss statement
  5. Cash Flow statement
  6. Depreciation Schedule
  7. Ratio and analysis
    • Calculation of Maximum Permissible Bank Finance (MPBF),
    • Current Ratio,
    • Debt Service Coverage Ratio (DSCR),
    • Profit Ratio,
    • Break Even Analysis.

Information required to prepare CMA report

CMA report not only contains expected future financial results but also past performance. Following information is required to prepare a CMA report.

  • Last 2 years audited financial
  • Existing Loan/Working capital sanction letter
  • Provisional and Projected financial statements
  • Borrowing statement for fresh borrowings

People often treat a project report and CMA report as same. However there are difference between a project report and CMA report.

You can prepare CMA report using Banking91 project report generator tool.

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